Chapter 6: The Costs of Circulation

"The general law is that all costs of circulation which
arise only from changes in the forms of commodities do not add to their
value. They are merely expenses incurred in the realisation of the
value or in its conversion from one form into another." (p. 152
[225-226])

Marx's discussion of the costs of circulation extends his
examination of productive and unproductive labor begun in Volume I of
Capital.
Parts of this chapter are among the most difficult sections in
Volume II, and Marx's argument often appears obscure, or even
contradictory. To attempt to clarify the distinction between productive
and unproductive labor, we shall return at some length to the
formulations of Volume I. Then we shall proceed to consider the
development of these concepts in the present chapter. Although our
reading here is by no means definitive, we shall try to avoid the
opposing pitfalls of over-simplification and scholasticism.

Marx's treatment of productive labor in Volume I of Capital
began at
a very high level of abstraction, not in the specific context of the
capitalist mode of production. In general, productive labor is labor
that produces a useful effect. This labor may or may not be embodied in
material objects -- Marx's several examples employing services (e.g.,
education in Volume I, transportation in the present chapter) make this
point clear -- but to be productive, labor must be productive of
use-value. Marx goes on to explain that under capitalism the scope of
productive labor is both narrowed and expanded: it is narrowed in that
only labor producing surplus-value is productive for capital;
therefore, from the point of view of capitalism, independent commodity
producers do not labor productively, even if they produce use-values in
the form of commodities. To work productively, laborers must sell their
labor-power to a capitalist and must be exploited, that is, must
produce surplus-value for the capitalist. Labor that is exchanged for
revenue is not productive, even if it is wage labor, for the labor is
consumed directly, not used in the production of value and
surplus-value. Thus, personal servants are not productive laborers,
because their services are consumed. This is the case despite the fact
that a servant may labor beyond necessary labor-time, and therefore be
exploited. (In contrast, servants who sell their labor-power to a
capitalist enterprise, which then contracts out this labor, are
productive, producing value and surplus-value for their employer.)

At the same time, capitalism expands the definition of
productive
labor as a consequence of the division of labor that it institutes in
the workplace. Here, Marx introduces the concept of the collective
worker. If laborers participate in the production of a useful effect,
that is, function as parts of the collective laborer working for
capital, the laborers work productively, even if their labor
contributes only indirectly to the production of use-value. Thus,
mental labor (e.g., that of draftsmen and engineers) necessary to the
proiductive process is productive labor. Marx differentiates tasks that
are intrinsic to the production of use-value from tasks that are
necessitated by the capitalist production of these use-values. Labor of
supervision, for example, is productive insofar as it fulfills
executive functions required by the productive process generally, and
unproductive to the degree that it is necessitated by the class
antagonism between workers and capitalists engendered by capitalism.

Let us now turn to Marx's discussion of the costs of
circulation.
The crucial distinction in this discussion is between unproductive
costs entailed by the commodity form of the product, necessitating a
process of circulation proper (i.e., exchange of values), and
productive costs which are a function of the use-form of the product
and, in this sense, are incidental to circulation of values.
Circulation as the exchange of values is an abstract process in which
the seller acquires money and the buyer obtains title to the commodity
exchanged. Material movement of objects ("circulation of matter") does
not necessarily take place when commodities are exchanged as values,
and, if it does, it is incidental not central to exchange.

The acts of buying and selling, whether these are performed by
the
industrial capitalist, by wage-workers under the capitalist's employ,
or by intermediaries (i.e., merchants) who function exclusively as
traders, are therefore unproductive because these functions are
entailed by the commodity form of the product.

Note that unproductive wage-workers are exploited when their
working
day extends beyond necessary labor time, even though they produce no
value or surplus-value. These workers' surplus labor serves to decrease
the capitalists' unproductive costs. The distinction between productive
and unproductive labor, therefore, is not a distinction between social
classes.

Costs of storage of commodities are productive insofar as the
labor
employed in storage is a function of the material properties of the
product, and not merely of their commodity form (that is, the fact that
they are exchanged as values). Here, Marx argues that the formation of
supplies is common to all modes of social production, not just to
commodity production or to capitalist commodity production. The
particular form of supplies is different under different modes of
production, however. In peasant economies, for example, most supplies
of means of production and consumption remain in the hands of their
direct producers. Under capitalism, the portion of supplies existing in
commodity form (as commodity capital) expands greatly. To the extent
that the maintenance of a supply is entailed by the commodity form of
the product, as, for example, when commodities are kept from the market
for speculative purposes, the labor expended in maintenance of the
supply creates neither value nor surplus-value: it is unproductive.
Moreover, under these circumstances, constant capital employed in
storage does not transfer its value to the product.

Marx treats transportation as a branch of industrial capital,
even
though transport is often entailed by the process of commodity
circulation, and despite the fact that transportation does not produce
a material product. This treatment is consistent with Marx's general
discussion. Transportation produces a useful effect, change of
location, and as such adds to the value of the goods transported. Labor
in the transportation industry is, therefore, productive labor. We
should note, in this context, that transportation as a service may be
consumed directly, as in the transportation of passengers.

Marx's treatment of productive and unproductive costs of
circulation
is made more difficult by his distinction between labor that is
productive for the individual capitalist, that is, labor that produces
value and surplus-value, and labor that is productive from the point of
view of "society." The first sense of productive labor is the sense
discussed above. From the point of view of society, only labor that
increases the mass of use-values comprising the social product is
productive labor. From this perspective, therefore, all costs of
storage, for example, are unproductive, because storage diminishes
rather than augments the use-values of the articles stored. This is as
true of storage necessitated by the use-form of the product as by its
commodity form, despite the fact that storage labor necessitated by the
use-form of the product produces value and surplus-value (i.e., is
productive from the point of view of the capitalist).

Marx's consideration of labor expended in bookkeeping also
presents
analytic difficulties. To the extent that bookkeeping is necessitated
by commodity exchange, that is, by the exchange of products as values,
it creates no new value, and hence is unproductive for the capitalist.
Likewise, the instruments of labor employed in unproductive bookkeeping
activity (e.g., writing implements, ledgers) do not transfer their
value to the product. Marx acknowledges, however, that bookkeeping also
serves partially to regulate social production, and, as such,
transcends the commodity form of the product. He does not pursue this
point, however, because the context of the discussion is the exchange
of products as values.

To conclude, then, productive labor under capitalism is labor
that
produces surplus-value for a capitalist. To produce surplus-value,
workers must sell their labor-power to a capitalist, must (as parts of
the collective worker) produce a use value, material or nonmaterial,
and must be exploited. The importance of the
productive/unproductive-labor distinction for Marx's political economy
lies in his argument that only productive workers make a positive
contribution to the production of surplus-value; instead of
contributing to the production of surplus-value, unproductive workers
must ultimately be paid from it.